An Analytical Procedure Used to Test the Reasonableness of an Account

question 56

Multiple Choice

An analytical procedure used to test the reasonableness of an account balance occurs when the auditor calculates the expected balance and compares it with the actual balance. The auditor's expected account balance may be determined by:

• A) using industry standards.
• B) using Dun and Bradstreet reports.
• C) relating it to another account that involves financial statement articulation.
• D) inquiry of the client.

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Definitions:

Capital

Capital refers to financial assets or physical resources that are used in the production of goods and services, including machinery, buildings, or money invested.

Workforce

The group of people who are engaged in or available for work, either in a country or a firm.

Economic Efficiency

A condition in which all resources are allocated in a way that maximizes the total benefit to society or minimizes waste.

Voice Mechanism

A means by which individuals or groups can express opinions, feedback, or concerns, often in the context of organizational decision-making or governance.